TUESDAY | July 1, 2008

Like rush hour traffic on our local freeways, innovative legislation to build new roads and mass transit projects faster and for less taxpayer money is sitting idle in Sacramento. The frustrating part is that it has nothing to do with the state budget crisis. Instead, it has everything to do with lawmakers buckling under the threats of powerful government employee unions who place their special interests above the real needs of Californians.

The status quo is simply not acceptable when California faces half a trillion dollars in overdue infrastructure improvements. Our highways, bridges and water projects were built to accommodate the California of the 1960s, not a state fast approaching 40 million residents. Lawmakers used to invest 20 cents of each tax dollar on capital improvements. Today, that number has dropped to less than a penny.

No realistic amount of new public bonds or government spending can by themselves ever meet these enormous infrastructure challenges. The Legislature must make it easier for private companies to partner with the state to help finance, build and operate new infrastructure, often at a much lower cost.

Under the current system, each new infrastructure project that involves a public-private partnership must be approved by a vote of the entire Legislature on a case-by-case basis. This highly politicized process has netted only one new project during the past two and a half years.

A broad coalition including cities, construction trade unions, transit agencies and business groups strongly support public private partnerships. Billions of dollars have already been spent on successful projects throughout the nation and the world. Our public interest would be protected through provisions in the contracts that provide for on-going monitoring and oversight of each project. Through this process, everyone wins—the state, construction trades, private sector and the general public.

The Professional Engineers in California Government (PEGG) union flexed their powerful political muscle to stop a bill ( AB 2600) that would have allowed state agencies greater flexibility to partner with the private sector.  PEGG is interested in preserving their monopoly over state infrastructure projects at the expense of everyone else. This fear is very shortsighted and self-serving since only 15 percent of all projects are expected to be candidates for private investment and operation. But 15 percent more investment in infrastructure could make a big difference for all Californians.

The longer our lawmakers allow public employee unions to stall new infrastructure projects, the longer Californians will be staring at a sea of brake lights and an ocean of crumbling concrete.

And that’s The Business Perspective. 

Gary L. Toebben
President & CEO
Los Angeles Area Chamber of Commerce

The Business Perspective is a weekly opinion piece by Gary Toebben, President & CEO of the Los Angeles Area Chamber of Commerce.

by Gary Toebben, President & CEO, Los Angeles Area Chamber of Commerce

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